alone - Yum!

alonewe’redelicious.Togetherwe’reYUM!Multibrandingallows us to givemore choice andvariety to our customers.That’s howwe demonstrateour CustomerMania — fish, pizza,wings, burritos orchili dogs, anyone?Yum!16.

“MULTIBRANDING IS THE BIGGEST INNOVATION IN THE QSR INDUSTRY SINCE THE DRIVE-THRU WINDOW!”another. Remember, the concept should be able to offer the customer a great dining experience that encouragesmore frequent visits.Aylwin: What do your customers think of it?Jackie: This is what our customers tell us: They say they love it, that they enjoy the variety, and that it helps satisfyeveryone in the family. It’s convenient for them because you’ve got two restaurants instead of one, and it’s fast.That’s because you’ve got a new store with the latest in equipment so you’re able to do things faster. We are workingto maximize the service time on the drive-thru to make sure customers get their food quickly. That brings thefocus to everyone that quick-service is important to the customer. And when you co-brand with A&W, you can seepeople heading to the table with those big, frosty mug Root Beer Floats. The kids can’t get enough of them. Thejukebox plays nostalgic music and it’s free. They love it. They can pick their own music if they want, but it plays allthe time anyway. We’ve done some consumer insight surveys and the people interviewed have given multibrandedrestaurants higher ratings than just the single brands.Al: Customers want and in most cases demand uncomplicated menu variety. Focus groups have told us that timeand time again. An old, redundant, or boring menu offering does not connect with today’s lifestyle. The concept ofMultibranding is much more relevant. But the true measure of customer acceptance and enthusiasm forMultibranding can be experienced through increased restaurant sales and more frequent core customer traffic.Customers have told us that they appreciate a quick-service concept that offers not only quality food but also arestaurant with established brand integrityLarry: What I tell you is anecdotal. When you open a multibranded restaurant and the volume doubles, then your customershave told you all they can tell you. It overcomes the “veto”— there’s something for everyone under one roof.Aylwin: How do you think Multibranding is being received in the greater franchise community?Jackie: I think most franchisees are open to and excited about the opportunity Multibranding brings to them.Franchisees I have talked to are happy with the results they have experienced with Multibranding and can see moreopportunity with future growth. Multibranding helps us protect our return on investment. I’m sure that’s very importantto all franchisees.Larry: I think it’s like anything else. There are people in any franchise community who are entrepreneurs by nature.People who are entrepreneurial, like me, are probably going to go after this kind of idea hammer and tong and“Yum! is focusing onimprovements to both ourexterior and interior image,concepting, back-of-thehousethroughput systemsand speed of service.”“Typically, salesrise at least 20%when a secondbrand is added toanother Yum!Brand.”17.

see where it takes them. It’s the folks who see the possibility unfolding in front of them and jump out to make thisthing work, it’s these folks who will lead in Multibranding. The others will come along because this is all about makingmoney. That’s why we’re in the business — we’re here to increase profits.Aylwin: How does Customer Mania impact operations?Jackie: We think Customer Mania is a great initiative and very important to our success. We have seen improvementsin operations because of Customer Mania. I’ve been looking at our 1-800 customer hotline calls and havenoticed that our service complaints are down and I think we can continue to lower them. We think Customer Maniabrings focus to why we’re in business — and we’re in business for the satisfaction of our customers and TeamMembers.Larry: We’ve had an absolute blast with it. Before Customer Mania, we all understood the importance of good hospitality,but what Customer Mania does for our Team Members is make them realize that indifference to customerscomes across as rudeness. What Customer Maniacs need to do is totally bury indifference and make themselvesfeel as if their customers are guests in their homes. When we explain it to Team Members like that and they try it,they become believers.Al: Customer Mania from the restaurant point of view is contagious. I have seen managers develop their teamscompletely around Customer Mania. Say a Team Member shows up one morning and the manager senses that theperson is not going to contribute. The RGM might tell the Team Member to take a couple of hours off, regroup andcome back ready to contribute to the overall benefit of the restaurant. Customers can feel the enthusiasm ofCustomer Mania at the front counter, and that’s why it’s contagious.Jackie: Okay Aylwin, let me ask you one. As the President, Chief Multibranding and Operating Officer, what are theresources you’re putting behind Customer Mania?Aylwin: I’m glad you asked. We’re serious about Customer Mania and we’re dedicated to driving it across the system.In addition to the quarterly training in the restaurants, we’re putting about 150 or so of our best managers,30 to 40 from each of our brands, into the restaurants to inspect the stores and ensure that we are meeting orexceeding our CHAMPS standards. This “CHAMPS Excellence Review” process allows us to then sit down with theleadership and go over the results so that we can improve upon them. This represents an $18 million commitmentto ensure that our leaders get the training, support and encouragement they need to succeed. Encouragement iskey. We’re using this as a great way to recognize our teams and create more role models for Customer Mania.We havethe potentialfor 13,000multibrandedunits in theU.S. alone.Customers prefer ourmultibranded restaurants6 to 1 over singlebranded ones.18.

31+1=19.

Serving up100%with aCHAMPSyes!

BECOMING THE BEST RESTAURANT OPERATOR IN THE WORLDWith five great brands and over 840,000 Customer Maniacs-in-Training around theglobe, we’re committed to building an operating culture where everything is centeredon our customers. For us, it’s executing the basics, delivering 100% CHAMPS with a Yes!attitude and mindset. It’s about daily energy, intensity, and a passion to take our operationsto the next level of excellence. It’s about jointly creating consistent performancethat puts our customers first. In this roundtable, Yum!’s Aylwin Lewis, President, ChiefMultibranding and Operating Officer, talks with four Restaurant General Managers tolearn how Customer Maniacs think, act, and respond to the customers they love to serve.We all strive to be CHAMPS!David: You’ve now instituted a global operating platform, tell our shareholders about it.Aylwin: It’s more important than ever to commit ourselves to running great restaurants better than any of our competitors.And that means increased focus on satisfying our customers and anticipating their needs. The key isCustomer Mania. And the way we’re driving that is through continued training and improving execution throughour 100% CHAMPS with a Yes! program. We’re training people four times a year, making steady progress andhaving fun doing it. We just need to continue to drive success at the restaurant level and get better, and better andbetter at satisfying our customers. Rather than me talking about it, let me ask our #1 leaders, our RGMs, howthey’re leading the way.Aylwin: What were you most proud of in 2002?Omar: Without a doubt, it was the rollout of Customer Mania. Once my Team Members were trained, we wereready to roll. Everyone realized it was a smart way to do business and one in which they could personally benefitas well. Several have told me that Customer Mania helped them learn to think like a customer.Mike: CHAMPS set the standard in my restaurant several years ago, but last year we especially drove the wholeCHAMPS with a Yes! attitude and that made a real difference for the team and for our customers. They both noticedthe difference. It meant that the customers won — and the customer must always win.DeVonne: Customer Mania defined a way of life in my restaurant last year. It empowered Team Members to makedecisions on behalf of their customers and that empowerment created ownership by the team.Alfredo: Customer Mania brought Team Members and RGMs closer together across the system. It certainly did in myrestaurant. It helps everyone understand better what everyone else has to do to succeed and enables him or her topitch in and help. Each also became more aware of their brand and of the importance of customers — repeat customers!ROUNDTABLEPARTICIPANTS:From left to right, top to bottom:1 . Aylwin Lewis, President, ChiefMultibranding and Operating Officer isthe moderator of this discussion.2. Alfredo Arroyo, RGM3. DeVonne Waters, RGM4. Mike Nunez, RGM5. Omar Gaines, RGMLeft Pizza Hut RGM Todd Exley is leadinghis team to perfect CHAMPS scores,while driving his same store sales $19,000a week! 2JR Pizza Enterprises1. 2.4. 5.3.As President, ChiefMultibranding andOperating Officer, Aylwinregularly holds roundtablediscussions with RGMs.Here’s one he recentlyhad with several Taco BellRGMs in Florida.21.

Below “Since the roll-out of ourCustomer Mania training program,I’ve noticed a difference in our TeamMembers. They really understandwhat it means to put the customerfirst. I really think they felt they caneach make our customers’ experiencein our store the best it can be.”Cheryl Richardson, RGMPizza Hut/Taco BellLeft “Customer Mania makes this an excitingplace to work and an exciting place to servecustomers. I love talking to our customers. Whenthey smile, it makes us smile too. It has broughtus closer to our customers and to each other.People take more pride in their work and havemore fun doing it.”Josh Dringenberg, Team MemberKFC, Harman Management“Customer Mania to memeans that a smile is thefirst thing they see. I takegreat pride in making suremy customers feel athome.”Kelly Holsclaw, Team MemberLong John Silver’s/A&WAylwin: What is the toughest part of your job?Alfredo: When we’re busy it’s great. Everyone is in place; they’ve been fully cross-trained to step in and take over whensomeone else on the team needs help. The drive-thru is zipping along, the lobby is full and the orders are flying.That’s what makes our job the most fulfilling. The toughest part of the job is managing hours when sales are slower —typically late afternoon between lunch and dinner crowds. If you don’t watch it, that’s when the team can lose its focus.Mike: You know, as a manager, you have to practice Customer Mania with the customers but you have to practiceit with your Team Members, too. You have to be just as alert to their needs as you do your customers’ needs. It canbe a pretty tough balancing act sometimes.DeVonne: The job of an RGM is incredibly complex sometimes and you are the one who has to deal with all thechallenges — from personnel to operations, you have to make sure everything works right all the time. I’d say justbeing the one who makes sure the place keeps hopping is the toughest part of my job.Aylwin: How are you reducing Team turnover to drive more consistency for our customers?Mike: Customer Mania has provided us with a super edge in hiring great Team Members and in keeping the greatones we’ve put so much effort into training. We’re building a reward and recognition culture, one that gets ourteam pumped up and excited about satisfying each and every customer. It’s a great culture we’re creating and itmakes a big difference in the store day to day and makes people want to stay.Alfredo: I agree. We have a very positive attitude in our restaurant, due largely to Customer Mania. My job isdifferent with Customer Mania and the Team Members feel more positive about their jobs too. Not having toconstantly deal with turnover issues has made me a better manager.22.

”CUSTOMER MANIATRAINING was kindof challenging —and fun.The bottom line is it mademe feel empowered —I’m a professional! AndI know I can make mycustomers’ experiencesthe best they can be.And I train my team to dothe same, every day.”Bruce Taylor, Assistant Manager,KFC/Long John Silver’sDeVonne: Selection is the key, I think. When it comes to hiring great new Customer Maniacs, I go through 50 applicationsjust to get one Team Member. It’s a time-consuming, always-uncertain process. I would much rather putextra efforts into making sure my existing Team Members are happy and fulfilled in their jobs.Omar: It’s about love. Love your people…love your customers…show it every day.Aylwin: How important was the Speed of Service focus to you in 2002?Alfredo: We used the Speed of Service tools that the company provided us with and they made a difference. Havingthe tools is one thing, knowing how and when to apply them is another. I think we have developed some excellentprocesses for applying these tools and I think the results show up at the drive-thru window every day.Omar: The customer is sitting out there in the drive-thru watching the clock in his car tick by. If you can shave asecond or two off every order you not only make those individual customers happy, it can mean thousands ofdollars to your restaurant over the course of a year.DeVonne: We have contests in our restaurant for the most cars and the most transactions coming through the drivethru.I find that’s a great way to motivate Team Members to increase the Speed of Service. It’s just one more waywe’re putting our customers first.Aylwin: What are some of the critical operational tools that will help us get better and better and better at satisfyingour customers?Mike: I really like the Balanced Scorecard. It helps us focus on our performance and get better and better in fourkey areas: people, customers, sales growth and profits. When we use it, we can get critical information that can23.

Left “Customer Mania isgiving 100% of your energyand enthusiasm to makingyour customers 100%satisfied — every hour,every day.”Joe Gootee, Assistant ManagerLong John Silver’s/A&WBelow “I’m proud of my work. I make sure thatevery piece of chicken I fry and every product Imake is delicious. That’s because I know thatwhat I’m doing back here is being so wellreceived out in the dining room. And that to meis what it means to be a Customer Maniac.”Amadou Gouzae, Cook,KFC/A&W, Luihn Food SystemsAbove “I have fun and love the people Iwork with. As a Team Member, I love feelingthat I can make a difference. And I can. OurCustomer Mania training taught us that. It’salso about being polite to the customer andtrying to make them feel that he or she is our#1 priority.”Elizabeth Parkerson, Team Member,Taco Bell, Southern Multifoods Inc.help us run our restaurants better. We talked about reducing turnover earlier, and I think the Balanced Scorecardis another great tool we can use to reduce turnover.DeVonne: I agree. It really helps us target our progress. We know exactly where we’re doing well, and where weneed to focus more of our attention. Now that we’re doing CER (CHAMPS Excellence Review), I think Team Membersare even more aware of Customer Mania and its importance. We don’t know when a CER visit is going to happen,so we’ve got to be on our toes all the time. And when we get the results back from the visit, we always sit downand go over them carefully to make sure we’re executing against our standards and delivering on our 100% CHAMPSwith a Yes! program.Omar: The unannounced visits really are a great training tool and great way to recognize my team. I use them as achance to pat my people on the back and show them how important they are. And that I care about them. My teamis important to me. I really like seeing the increased focus on Team Member training and the fact that we’re trainingmore frequently. It makes us better able to give our customers what they want. And that’s what it’s all about. Givingour people the confidence to handle every situation and get better and better at serving our customers.Aylwin: It just shows you, with people like this running our restaurants, putting their capability first and the capabilityof all our people in the system first, satisfied customers will follow and our company will make more money.That’s our formula for success.24.